LA COMES TO NEW YORK
NEW YORK MAGAZINE INTERVIEW WITH LA REID
22 JANUARY 2001
New York Magazine] L.A. Comes to New York When L.A. Reid
replaced Clive Davis as head of Arista Records, the industry reeled, artists threatened to
walk, and staffers snubbed him. Half a year in, he's kept the key stars and pumped up new
ones. And even "Mr. Davis" is working with him.
BY ROB TANNENBAUM
A few weeks into his new job as president and CEO of Arista Records, L.A. Reid got mad. He
was meeting with his two top executives to discuss the uncharacteristically meager sales
of Whitney Houston's The Greatest Hits, a glitzy retrospective of Arista's franchise
singer released seven weeks before he took office. In what one of the executives calls an
"out-of-body experience," Reid rose angrily from behind his desk and tossed over
"I realized that this thing was headed nowhere, and we were going to spend a fucking
fortune," Reid explains, his exasperation still fresh. The marketing plan for
Houston, he continues, was poor: The record was released in mid-May, instead of later in
the year when most superstar records appear, and key decisions about singles and videos
were mishandled. "This whole project was just botched up, from the very beginning.
This is what I walk into." Reid, a sleek, personable 44-year-old, brakes himself.
"Let me collect myself here."
Last year, in the juiciest boardroom intrigue the music business has seen in years, Clive
Davis was deposed from the presidency of Arista, the label he founded 25 years earlier, by
Strauss Zelnick, president and CEO of BMG, and Michael Dornemann, the company's chairman.
In his place, they installed Reid, who took over July 1. Soon after, BMG went back into
business with Davis, outbidding other labels by offering him a fund of more than $150
million to start a new label, J Records. Then, just as the situation seemed to settle
down, Zelnick and Dornemann left BMG, reportedly ousted by their boss, Bertelsmann
chairman Thomas Middelhoff, for their handling of several matters, including their
treatment of Davis.
Reid brought to the job a sterling record as a songwriter, producer, and head of R&B
powerhouse LaFace Records. But that didn't make it easy to replace Davis, the 67-year-old
industry veteran who revived the career of Carlos Santana and guided the label to
spectacular sales. "They hated me," Reid says. "The first two weeks, I
heard people say 'Clive didn't do it that way.' " He started keeping a list and
eventually fired about 30 employees whose loyalties he said he doubted.
From the time Davis's replacement was first
rumored more than a year ago, he and Reid have issued press-release respect and praise for
each other without hinting at the resentment between their camps. Reid still takes care to
speak graciously of Davis -- whom he refers to as "Mr. Davis" and "the
master" over the course of several conversations. But he is also alternately amused,
annoyed, and angry over the criticism and rancor that greeted his appointment.
"The press loves Clive," Reid muses. "I'd read stories about myself coming
to Arista, and there'd be a picture of Clive. I never saw a picture of me." He still
recalls a story that dismissively labeled him a "rap executive." Then there was
the gossip columnist who reported that Reid was spending afternoons shopping at Gucci
while Davis was busy signing acts to his new label, including the boy band O-Town.
"I went to Orlando four months ago to see this band Clive signed. I thought it was
bullshit then, I think it's bullshit now. I wouldn't have signed it," Reid says
The story, he adds, "was racist." He pauses. "I don't play the race card.
I'm not that guy. I have an amazing life." Reid is only the second African-American
to run a major label (the other is Sylvia Rhone at Elektra), and he doubts that the
columnist has reported on the shopping habits of white executives like Jimmy Iovine or
Anyway, Reid adds with a smile, he doesn't shop at Gucci. "I have all my clothes
When Reid's promotion was announced, some reporters speculated that BMG bosses had
"groomed" him for the Arista presidency by sending him to Harvard to get an
M.B.A. in 1998. "I groomed myself," Reid counters. "I've wanted to run a
major record company for many, many years."
Indeed, with his largesse, his zeal, and his fearless string of quarrels with close
friends, Reid has been a mogul-in-training for years. Along with Kenneth
"Babyface" Edmonds, he produced some of the biggest pop and R&B hits of the
eighties (Whitney Houston's "I'm Your Baby Tonight," Bobby Brown's "Don't
Be Cruel") and manufactured state-of-the-art pop stars with sleek music and distinct
images based on class (Toni Braxton), sass (TLC), and ass (Usher). Unlike many of his
peers, who know more about marketing than about music, Reid understands music thoroughly
and gained renown for his prescience in spotting stars and choosing hits -- a valuable
forte shared by Clive Davis, who brought
LaFace into Arista.
As the label grew, Reid, who grew up borderline poor in Cincinnati, also earned a
reputation for high style. Arnold Stiefel, who managed Toni Braxton, recalls that Reid
traveled with "a valet who arrived ahead of him and brought two suits for every day,
which were arranged in color-coordinated order in his hotel suite. I always felt
underdressed and inappropriately casual when I met with him. He's like a prince."
Reid spread his 40th birthday party, a legendary 1996 bacchanal in Atlanta, over three
days. To get in, he says with a lewd chuckle, "you had to either be on the guest list
or be really fine."
"That was one of the illest parties of all time," marvels Sean "Puffy"
Combs, a close friend. "So much to eat, so much to drink, so many beautiful women --
it was like walking into heaven."
Running a label requires a gift for hand-holding, scolding, and other baby-sitting skills,
which Reid has in abundance. "I take care of artists. I give them love and
attention," he says. "He has a wonderful rapport with artists," agrees
singer Toni Braxton. "He can hear a song and go, 'Ahh, you've got to do that one.'
"He really loves music," says
Combs, whose Bad Boy label is distributed by Arista. Reid is also godfather to Combs's
son, Justin. "He understands music. He was an artist, so he understands the artist's
point of view."
"That's not to say he's soft," Combs adds. "I mean, he's gonna say no, he's
gonna fight if he has to fight, he's gonna scream if he has to scream."
On his way to running a major label, Reid has
clashed with many of the important people in his life, including Babyface; his first wife,
Pebbles; and Toni Braxton (who once sued him), as well as Davis, who gave Reid the biggest
opportunity of his career.
After more than a decade of running LaFace, Reid was eager to sell the label to Arista so
he and Babyface could cash out, and he'd be free to run a larger label. At LaFace, he and
Babyface signed the artists, produced their music, and made the videos, while Arista
distributed, marketed, promoted, and sold the records -- and made most of the money.
Davis wouldn't endorse Arista's purchase of LaFace because, says a source close to the
situation, he was worried about the label's balance sheet, which included large advances
to acts like TLC, Toni Braxton, and Usher, and wanted to wait until those payments were
recouped. This "pissed off Reid," says a source; other Arista and BMG executives
had taken huge paydays, and Reid wanted to be rewarded for years of loyalty to BMG,
including, he says, introducing Davis to Combs. Reid also thought Davis was claiming undue
credit for the success of LaFace acts. "At this point," says the source close to
Reid, "L.A. realized that Clive was for himself, and L.A. needed to be for
himself." So Reid went around Davis and proposed a sale directly to top BMG
Davis's contract was set to expire on July 1, 2000, and Zelnick reportedly wanted Reid to
join Arista as CEO and president and report to Davis, who would become chairman for life.
But Davis wasn't interested in the new title. As president of Arista, he had an
arrangement with the company known as "phantom equity," because Bertelsmann,
based in Germany, is a privately held corporation. In the fiscal year 1999, Arista
declared revenues of more than $500 million in the U.S., a company record. Davis, says a
source, earned between $15 million and $20 million in the final year of his five-year
contract as well as a onetime payout "considerably in excess of $100 million,"
based on a percentage of the company's earnings.
Davis says he wanted to maintain "significant equity" in whatever position he
took, and the offer of chairman did not include any. When Zelnick and Dornemann proposed
the new job over dinner at Lutèce in November 1999, Davis got up and left. At this point,
says the source close to Reid, L.A. was worried about taking any job in which he would
report to Davis: "L.A. was afraid Clive would cut his balls off."
The night of the Lutèce debacle, Reid got a phone call at home asking him to run Arista.
As part of the deal, BMG, which already owned half of LaFace, bought the remaining half
for a reported $100 million.
Reid thought he was a rich man until he moved to New York. While living temporarily in the
Four Seasons Hotel, he began to look for a three-bedroom apartment on the Upper East Side.
"My God!" he exclaims, eyes wide with horror. "Anything with real
square-footage, 3,000 square feet or something like that, it's millions and millions of
dollars! I just can't stomach it."
He also had to contend with relentless predictions that Arista's top acts would desert the
label for Davis's new venture. Carlos Santana said he would followDavis "wherever he
goes," while Aretha Franklin regally declared, "If Clive leaves, I leave."
"I think all of those stories were planted by Mr. Davis's camp," says Reid.
In fact, no superstar act has left Arista. "There was no way" BMG would
countenance big acts leaving Arista for J, says a source, because of simple economics. BMG
gave Davis 50 percent equity in J, which means the corporation makes more money per
CD with Arista acts than with acts on J.
Instead, Zelnick brokered a deal that allowed Davis to take five burgeoning acts,
including Next, Deborah Cox, and LFO, a boy band whose album had sold more than a million
copies. Reid says he didn't want to keep any of the five, though his general manager
argued to retain LFO: "He said, 'Are you crazy? Have you seen LFO's sales?' "
Reid shrugs dismissively. "I didn't love them, so I didn't fight."
Beneath the public congeniality, Reid and Davis disagree on significant events. Most
significantly, Reid says he brought Puff Daddy to Arista. "I don't know why he claims
that," counters Davis, who says the meeting was set up by Puffy's business manager,
Puffy, whose deal with Arista made him a lucrative asset for BMG, confirms Reid's version:
"L.A. had a meeting with me about bringing me to LaFace, and after I spoke to him, he
was like, 'This is bigger than some production deal. I need you to sit and meet with
Clive.' And he brought me to Clive. It was gracious of him, and also smart."
Reid says he and Davis have taken Christmas vacations together, though Davis says their
two families were merely on St. Barts at the same time. When the offer came to replace
Davis, Reid says, "my only concern was whether or not Clive would think I had
betrayed him in any way." When asked if Reid did betray him, Davis offers an
exoneration: "No. I really have no problem with L.A. Reid whatsoever. I will root for
him. I will root for Arista. I will do everything I can to help him."
He means that literally: Davis and Reid are collaborating to pick songs for the singer
Monica's second album, and Davis will continue to help with Santana and Houston albums. To
Reid and Davis, the conflicts between them, which might destroy some relationships, are
less significant than the opportunity to make a few more hits.
When Antonio Reid was 9, before he'd earned the nickname L.A., he became fascinated with
his uncle Albert's drum kit. The third of four children, Reid saved $3 from tips he earned
working in a barbershop, bought a pair of drumsticks, and banged on the floor to James
Brown 45s. Brown often recorded at a Cincinnati studio, and Reid "would stand outside
and hope to meet someone. Just the sense of being around the music got me excited."
His mother, Emma, was a seamstress, and his father was gone. Reid never asked about his
father, who didn't keep in touch. "I think I've become a bit of an overachiever as a
result of it to be quite honest," he says. "The way it affected me was, 'I'm
gonna prove that I can be somebody, that I should be respected. And he should've been
His mother remarried when Antonio was about 6, but Reid won't offer his stepfather's name:
"He ain't important enough." Sensing that Antonio was prematurely responsible,
she gave him more latitude than her other kids, and by the start of his teenage years, he
was playing in bands; significantly, he played in both funk and rock groups. One day, he
wore a T-shirt with the Los Angeles Dodgers logo and was anointed with his enduring
nickname, even though he'd never been on an airplane, never mind visited L.A.
Reid and his band moved to Indianapolis, where, checking out the local competition one
night, he spotted Kenneth "Babyface" Edmonds, a shy, left-handed guitarist whose
group let him sing only one song a night. Impressed and typically aggressive, Reid invited
Edmonds to join his group, the Deele, which had a few minor R&B hits.
Lots of local stars deploy their talents on no grander goal than free drinks and freer
girls, but Reid bonded with Edmonds over their seriousness of purpose. "Neither of us
were big party guys," says Reid. "While the other guys in the band would go out
and have fun, he and I would sit at home and write songs." Rather than the fleeting
glamour of being a musician, Reid wanted ownership and equity, with their greater rewards
In 1990, Reid's wife, Pebbles, located his father, who was living in Florida, and brought
him to their house in Atlanta to meet his son for the first, and only, time. Had his
father followed Reid's career? Did he know his son was successful? "I don't know how
much he knew," Reid says thoughtfully. Then he suddenly laughs. "When he came to
my home, he realized I was successful."
After several years of making hits, L.A. and Babyface "fell out," says Edmonds.
He wanted to focus on writing and producing, and Reid wanted to run a record company.
"It drove us in two separate directions." "I became a noodge," admits
Reid, who pushed Babyface to write with new LaFace singers. " 'What do you want me to
work with Damian Dame for when I can work with Madonna?' It was kind of a
tug-of-war." It's rumored that the split turned bitter, with long silences between
the two. "I never thought it got bad," says Reid, who insists he doesn't take
conflict personally. "Maybe it did."
LaFace had other problems, most notably the bankruptcies of its two biggest acts, TLC and
Toni Braxton. Both Reid and Edmonds shift responsibility to Arista, whose contracts the
artists signed. "We weren't in the position of power," says Edmonds.
TLC was the more troubling case, because the
trio was managed by Reid's first wife, Pebbles. The group had the standard low royalty
rate new artists start with, and its contract with Pebbles' company, Pebbitone, gave her a
substantial share of profits, too. "TLC wanted Pebbitone out of their lives,"
says Reid, "and the only way they could get out was to file bankruptcy." In
turn, Pebbitone sued LaFace -- by then, Reid and Pebbles, who have two children, had
separated, and Reid calls the dispute "one of the breaking points in my
marriage." In the music business, lawsuits are often just negotiations by other
means, and once TLC settled with Pebbitone, it signed another contract with LaFace.
Soon after, Toni Braxton filed for bankruptcy in the midst of a contract renegotiation. It
looked bad for LaFace, because Braxton had sold more than 16 million records. When Braxton
went on The Oprah Winfrey Show to discuss the bankruptcy, a source adds, Oprah called
LaFace "and said, 'Toni's on my show today; she intends to make you guys look really
bad. But I think it's bullshit, so watch the show.' " Indeed, Winfrey scolded Braxton
for excessive spending, saying, "I didn't know Gucci made silverware."
Braxton withdrew the bankruptcy claim when she got a new deal with Arista. She and Reid
had been "so close, almost like relatives," she says, but during the dispute,
they communicated only through lawyers. "For a long period of time, I was
angry," Braxton adds. But now she coos lovingly about Reid; after all, she says,
laughing, LaFace and Arista "gave me a really nice pay raise."
On a November night, L.A. Reid is hosting a raucous private party upstairs at Moomba to
celebrate a new release by the brilliant Atlanta hip-hop duo OutKast, whose album had
debuted at No. 2 on the charts. Reid arrives late, wearing sunglasses and a flashy
four-button suit, and offers brief, proud praise of OutKast, predicting to the assembled
staff and friends that album sales will top 6 million. Across the room, OutKast rapper Big
Boi, outfitted in a camouflage jumpsuit, orders another Hennesy and raves about the wisdom
and opportunities Reid has given OutKast since the duo auditioned in Reid's office eight
years earlier: "It's like working with your uncle."
Reid merits credit for guiding OutKast's commercial and critical success, and the party
marks one of the high points of his first six months at Arista. During that time, the
label has also had success with two new singers, Pink, whom Reid signed, and Dido. Reid
has also signed exclusive deals with producers including Kevin "She'kspere"
Briggs and Janet Jackson's production team of Jimmy Jam and Terry Lewis and has also moved
to mend Arista's weakness in rock.
This fall, he won a costly bidding war for Edema, a tough outfit led by the younger
brother of Korn singer Jonathan Davis, though one competing A&R honcho says Arista
overpaid for a mediocre band. Reid flew to Los Angeles to meet Edema and sell it on
Arista: "I told them, 'Look, I haven't had success in your genre of music. But I
won't lose. If you want to be on a team with a winner, you should be on a team with me.
Because I just won't fucking quit.' "
There are signs 2001 might be a tougher year. Puffy Combs's Bad Boy label has stumbled,
and there is no new album coming soon from Santana or Whitney Houston, who was nearly
arrested with half an ounce of marijuana in a Hawaii airport and is persistently rumored
to have a drug addiction. "Are you okay?" Reid asked Houston tactfully when he
assumed the presidency of Arista. "Is there anything I can do to help you?"
"Yes, I'm okay," she replied. "Just make sure my record's a hit."
"I see what people write and what people say about Whitney," Reid observes.
"But then I look in her eyes, and I don't see it. She's the same girl I've always
Among his challenges, Reid has to adapt to new relationships with old friends. Combs, for
one, bristles when it's suggested that Reid is now his boss: "Get the fuck outta
here. I'm my own boss. He's my partner."
Reid has already shown he can navigate management obstacles. In November, a staff member
leaked a new song by Usher to radio without the consent of Reid, who says, "I think
people were trying to force my hand, and it pissed me off." The leak, he says,
"cost a couple of people jobs. We'll never have that problem again." While Reid
was struggling through an admittedly "tough" few weeks, J Records' first
release, the debut single by O-Town -- the boy band L.A. Reid disdained -- was the
top-selling single in the country in its first week in stores.
There's also a chance Reid hasn't seen the last of BMG's corporate intrigue. Though
Zelnick turned BMG from a disaster into a success, he also "made one massive blunder
after another," says a BMG source, including clashing with Davis, and, most notably,
feuding with Jive Records CEO Clive Calder, described by the manager of one platinum act
as "a bomb-thrower." Last year, when 'N Sync resolved to leave the BMG-owned RCA
for the BMG-distributed Jive, home to the Backstreet Boys and Britney Spears, Zelnick
retaliated by suing 'N Sync, Jive, and -- most provocatively -- Calder himself. "How
do you sue your partner?" scoffs a BMG source, who estimates the company could lose
as much as $100 million because of 'N Sync's defection. If Jive exercises its contractual
right to end the distribution deal on six months' notice, it could lose even more.
BMG moved to settle the chaos by naming a new
president of BMG Entertainment: Rudi Gassner, a BMG chieftain who only months earlier
pocketed a $7 million severance payment from the company, says a source, when he quit
because of disagreements
with Zelnick. Over the Christmas holiday, a week before he began the job, Gassner, a
former professional soccer player, died of a heart attack while jogging. A successor, Rolf
Schmidt-Holtz, was named the day after Gassner's funeral in Greenwich, Connecticut. If BMG
concludes a simmering merger with EMI -- the two combined would create the world's largest
music company -- Reid could have a fourth boss within his first year.
Reid hasn't taken the quick-fix route of signing boy bands: "I don't believe in
chasing trends," he says loftily. To his credit, he would rather build credible
career artists. But sales at Arista are down from last year's record high: One executive
tracking the label's numbers says, "Right now, I doubt Arista will do $250 million
this year." ("It'll be much higher than that," counters Reid, who contends
that Arista wouldn't have grossed that much this year under Davis either.) Add the
revenues lost when 'N Sync jumped to Jive; the $150 million the company may lay out for J
Records, which may not turn a profit for several years; approximately $100 million to buy
LaFace; and the severance packages for Zelnick (reportedly $20 million to $50 million) and
Dornemann, and BMG's bottom line is stained with red.
Whitney Houston returns Reid's call, and he
snaps into action, dispatching an assistant to
retrieve a tape: "Right now, hurry up!" But when Reid picks up, his tone nearly
melts the receiver. "Whitney!" He listens and chuckles warmly. "I am,
honey. You know I am."
After a few minutes of talk about family, Reid explains that he's found an unreleased song
he and Babyface produced for Houston ten years ago. He turns up the speakers in his office
and plays it to her over the phone, bouncing in his chair. "Isn't that hot?" he
A month before he took over Arista, Reid threw one more lavish party, his three-day
wedding to schoolteacher Erica Holton in Capri, Italy. Guests arrived to find wine, bowls
of iced cherries, and scented candles in their rooms -- "like Hollywood stars did
back in the day," says Combs. The couple are expecting a child in April. (In addition
to Ashley, 17, and Aaron, 10, his kids with ex-wife Pebbles, Reid has a son, Antonio Jr.,
22, from an earlier relationship.) Guests -- including Usher, Mariah Carey, Veronica Webb,
and Zelnick and Dornemann -- were required to wear white linen.
Though Reid has a lionish string of fights with close friends, he also evidently knows how
to make peace afterward: Clive Davis didn't attend the wedding, though he sent a gift,
flowers, and a card. And one of the two best men was Babyface, who is also currently
working on his first album for Arista, to be released in the spring.
The singer has been consulting closely with Reid, who he says is "always
pushing" artists to record stronger material, to load albums with extra hit singles.
Babyface, who's usually known for his gentle demeanor, is prepared to return the pressure.
"If the label isn't doing everything it should, then I gotta call him and say, 'Hey,
you suck,' " he chuckles. "But he doesn't want to hear me call and say that to
From the January 29, 2001 issue of New